Just weeks before Tax Day, the Federal Trade Commission is suing the maker of TurboTax for the company's advertisements, claiming they deceive customers.
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According to the agency, TurboTax bombards consumers with ads for "free" tax filing services, then charges them when it's time to file. The FTC has issued an administrative complaint against Intuit Inc., the owner of TurboTax, for "misleading consumers" with "bogus advertisements."
"We are asking a court to immediately halt this bait-and-switch, and to protect taxpayers at the peak of filing season," Samuel Levine, Director of the Bureau of Consumer Protection wrote in a statement.
The Commission has also authorized the filing of an administrative complaint alleging that the company's practices are illegal. Both complaints allege that Intuit's practices violate the FTC Act.
The company's "free" service is not available to millions of taxpayers, such as those who get a 1099 form for work in the gig economy, according to the FTC. "In 2020, for example, approximately two-thirds of tax filers could not use TurboTax's free product," the Commission wrote.
In 2021, around 56 million people filed their taxes with TurboTax, according to an Inuit shareholder presentation.
In response to the agency's action against TurboTax, Kerry McLean, executive vice president and general counsel of Intuit, said in a statement that the claims "simply aren't credible," adding that almost 100 million Americans have filed their taxes for free with TurboTax in the last eight years.
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